June Newsletter

June Newsletter

Protect Our Benefits is an organization whose goals are to enhance the dignity and quality of life of all San Francisco City and County retirees, and preserve their health and retirement benefits. The opinions are those of the writer.

SFERS V. CCSF (pre-1996)
I’m happy to report, “there is a light at the end of the tunnel”. On May 17, 2018, the Court of Appeal sent out an “oral argument notice” to both parties as well as POB. Each party was required to respond within 10 days, if they wish to present oral arguments or the Court will deem them waived. As of this date all parties have responded affirmatively to present oral arguments. Next step – a court date.

Health Service System
By now, you should have received your Dependent Eligibility Verification Audit request from HSS. HSS is asking for verification of your currently enrolled spouse’s or domestic partner’s eligibility to receive benefits. According to HSS, there are about 5% of dependents currently covered that are ineligible. Just follow the instructions and make sure that you redact any pertinent information, such as: social security numbers, income, etc., especially if you use your 2017 tax return. If you have any questions, or need assistance, you can call the Dependent Verification Center at (1 (800) 725-5810).
If you have any complaints about your health plan services—United Health Care, Blue Shield or Kaiser—be sure to notify HSS. These programs are tied to performance qualities within their contracts—which they must honor.

SFERS Retirement Board
In keeping you, the SFERS retiree, informed about your SFERS fund, POB has made a commitment to enlighten you with articles over the next several months.

The SFERS plan is doing quite well, despite the market’s recent volatility. The plan remains in a strong financial position with plan assets valued at 24 billion, and returning roughly 10% for the first 10 months of the fiscal year.

The Unfunded Actuarial Liability (UAL), which represents the difference between actuarial liability and valuation assets, has decreased from $3.5 billion to 2.5 billion. This unfunded liability is not an indicator of poor funding. Most, if not all retirement systems, have unfunded liabilities. Liabilities can occur each time active employee benefits contracts are negotiated, market conditions change, and demographic and economic assumptions are adjusted, etc. It is important to note that the unfunded liabilities are amortized over a period, and not required to be made as a lump sum payment.

What is important is the ability of the fund to have money on hand, invested responsibly, so that the returns on investments, as well as the assets of the fund, will pay all the retirement benefits of the plan. Unlike private sector firms, SFERS, like other state and local governments, is a perpetual entity. (They do not disappear, like many private firms who also take their plans with them.) In addition, employer/employee contribution rates can be increased when warranted.

The SFERS plan is currently rated at 87% funded, which indicates a well-managed fund. SFERS has consistently outperformed their peers. As of FY 2016-17, in the past three to five years, SFERS has ranked in the top of public pensions systems, 3% to 5%, respectively,.